Thursday, June 13, 2024

How to Structure Your Agency

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Think back to when you first started your agency. You discovered in yourself a real passion and a talent for helping other businesses with their marketing and you found success with client after client. But then you also discovered the realities of running a business, team meetings, net terms, hiring and firing, and managing employees.

Now, you’re questioning whether to go back to being a solo consultant. If your training and education was in anything other than business, how do you structure your agency to function as an effective business and set you and your team up for success? Matt Heinz is going to talk to us about.

You can listen to the podcast in its entirety or read on for the highlights.

Matt’s career focuses on consistently delivering measurable results with greater sales, revenue growth, product success, and customer loyalty. He founded Heinz Marketing over 15 years ago and brought tremendous experience in sales and marketing to the business. But he recognized early on that he needed to bring in people and systems to help him tackle the business aspects of running an agency.

And that’s when he discovered EOS, the Entrepreneurial Operating System, which offers businesses a framework on which to structure goals, measurements, and meetings.

What made you decide to start an agency? And where did you focus your efforts?

Matt Heinz: Let me take you back. I studied political science and journalism at the University of Washington with the intent of following the steps of Woodward and Bernstein.

I loved writing. I loved journalism. Loved storytelling. And long story short, I didn’t last long there. I went to a PR agency, went to Microsoft for a while. Ran marketing at a couple Seattle area startups. Eventually, I just kind of wanted to try to do my own thing. I didn’t intend to build a business. I just wanted to try to do independent consulting work.

So a little over 15 years ago, I quit my job. Well, I started with a laptop and a bus pass and just tried to do my own thing. And it started to grow. I started to hire some people but didn’t really have a plan. It sort of happened organically over time. And thankfully, you know, I found EO, which is the entrepreneurs organization, which is a collective of a lot of other entrepreneurs growing their business.

And then EOS, as you mentioned, which ironically is not affiliated, but is sort of this operating system that has been instrumental in helping us manage our business, grow our business.

Mike Allton: I want to dig into this EOS because you, in this great interview with Logan Lyles at Teamwork talked about how you implemented EOS as a framework for growing and structuring your agency.

What is EOS (Entrepreneurial Operating System)? How does it work for your agency?

Matt Heinz: If you’re familiar with Harnish’s “Mastering the Rockefeller Habits 2.0 Scaling Up Systems” some of the same general principles are part of EOS. EOS is built for companies that are not that complex but still need to manage how they grow.

Knowing your quarterly objectives

And so, it’s got what they call the Vision Traction Organizer, which is a one-page plan that goes from your purpose and your values down to what the quarterly objectives are. It includes a cadence and a real discipline for leadership meetings on a weekly basis as well as quarterly and annuals.

It includes communication to all staff and sort of a waterfall of the vision, mission, tenure goal, all the way down to what everyone’s doing on a quarterly basis. And I love how it really focuses you on a small set of objectives.

[EOS] forces you as a business to choose things that are going to have the biggest impact on your business.

And you’re not 100 percent right in those choices, but the format forces you as a team to create that focus.

Putting together an accountability chart

The last thing I’ll highlight is they don’t really call it an org chart. They call it an accountability chart. And so you start with the roles to be done and put people in those seats.

When we implemented EOS, it was the first time I put a real sort of formal leadership team in place. And it actually was a relief as an owner that I didn’t feel like I owned everything moving forward, even Sales and Marketing. I got a head of Growth now who really manages our Sales and Marketing.

I am heavily involved, but I don’t own the number. Having that shared accountability on different things but also having people really specifically know what they’re accountable for has been great.

Mike Allton: I love that you mentioned that it forces the organization to focus on those very few important things because a lot of people will compare it to like an OKR structure. And in a lot of ways, it is similar … except EOS also includes, like you said, the meeting cadence. It even includes the structure of the meetings.

So you’re going to have these very specific big rocks and milestones and scorecards. And you are to go over those every single week with your direct reports and your management and make sure that you’re all aligned and you’re still moving and making progress on those.

Defining Big Rocks

Matt Heinz: Well, so a couple things I’ll share, and again, it took us a while to get used to the rhythm and motion of the EOS system. But you know, we come into our quarterly meetings, and we have one of the things we’re expected to do is everyone comes and there’s four of us on the leadership team and everyone comes to that quarterly meeting and says, “Here are the big rocks that we think we should focus on for the quarter.”

And everyone will post them on a whiteboard and there will be like at least 30 to 35 things on that list. We have to winnow it down until we get to no more than five to seven. And when you first look at that whiteboard, you’re like, “There’s no way.  These are all really important. These could all be useful.”

I think without the discipline of the program, you’d be like, “Let’s all just divide and conquer. Let’s just all start making progress on this.”

So what we do, and this is a tool from EOS. We do something called keep, kill, combine. And so we go through the list from top to bottom.

Is this important enough to keep? Yes.

Next one: Is this important enough to keep? If we say, “Well, you know what? Now that I’ve seen the whole list, I think we can take that one off, or there will be some redundancy.” Or  “This one’s the master, the rock”  … Slowly you start to winnow that list down. And there really is magic, not just in the process, but in the people willing to do it.

When you have that on a basis of saying, “These quarterly rocks are in service to our annual goals. Our three-year goals of where we want the business to be in three years,” then our 10-year vision of  is feeding from our purpose and our values.

So, I mean, we literally talk about purpose and values in that conversation as we triage the quarterlies in service of the annual and the three-year goal. It’s amazing.

The other thing you mentioned is the structured leadership team meeting. When I first read the EOS literature and it said that you’re going to do a 90-minute leadership meeting every week, I’m like, “Poke my eye out now.”

But I will tell you, it’s become my favorite meeting of the week. And some are more fun than others. I mean, if you’re running and growing a business, especially in the last year and a half, it is not lollipops and daisies all the time. You have hard conversations about hard things.

But when you do it in that environment, when you can have open, honest, straightforward, transparent conversations, everything’s on the table, no egos anywhere. All the options are open. Let’s debate it and come up with a decision together.

Some of our hardest meetings have been our highest-rated leadership team meetings. And I think it’s pretty special.

Mike Allton: To your point, every meeting is supposed to be rated. The participants are supposed to say at the end of the meeting, “How was this?” And you start off the meeting by talking about what’s keeping you up at night. What a way to start a meeting, right?

If people are really paying attention and they’re invested, that’s going to open the closet a little bit and lets out some of those skeletons.

What challenges did you face or struggle with before you implemented the EOS system?

Matt Heinz: I don’t know, Mike, if you ever read the book,  The E Myth by Michael Gerber. The E in that book stands for the entrepreneur.

So the entrepreneurial myth is that if you’re good at something, you can run a business out of it, right? Hey, you make really great cookies. You should start a bakery.

It’s like, maybe, maybe not, right? And so the book says, to run a business of any size, as a founder, you have to be good at three things. You have to be good at the work, right? You or someone has to be good at the work. Two, you have to be good at keeping a train running on time. Don’t run out of cash, get things going, keep the operations running. And three, enough of a visionary to see where the business might be going, to see where you might be headed towards and thinking at least part of your time on like, how do I get there beyond just the day-to-day? so I learned that part early.

Just because I learned that doesn’t mean I was any good at it. So, you know, as we grew, I wasn’t doing a good job managing the team, to be honest. I wasn’t doing a good job creating standards and best practices for how we consistently apply what we say we do at a strategic and a value proposition level.

And I was getting frustrated doing things that I was competent at, but didn’t enjoy and didn’t feel like I was very good at. And so EOS allowed me to elevate some people on the team into positions where they are strong, where they are capable, where they are excited to do things that I am the opposite of, and it made it really easy for me to sort of say, here’s what I’m good at.

Here’s the things I can contribute to our organization. And I’m putting people in place so they have responsibility or enabled to own and execute on things where they are good, that shift to shared responsibility from people that are bought into the purpose of our business and bought into the reason we exist.
And that alone, like was also a big change. Like when we looked at, if you would have asked me five years ago, like what’s the purpose of your business? I would have said, well, we help, you know, companies with complex sales cycles, build predictable pipelines. That’s what we do. And, in the EOS process, I learned that that is not our purpose. That is our niche. That is what we do, right? But why do we do it? Why we do it is our purpose. So our stated purpose now as a business is to positively impact careers and lives by enabling work that matters. And that whole statement is really important to me, but I quote positively impact careers and lives multiple times a week.

When we make decisions internally and externally about where we’re going to focus and what we’re going to enable internally and externally, it allows us to get a little more creative as the market shifts, as needs change. What are we doing to positively impact careers and lives? What are we doing to enable work that matters?

And the way we manifest that through our skills and talents and opportunities. I think it allows us to be more creative but also helps us say no to things that don’t necessarily align with that.

Mike Allton: And see, this is why I just had to bring you on the show, because to me, I think a lot of people look at frameworks like EOS and think, “Oh, this is just another way to come up with goals. I can create SMART goals. I don’t need a framework.” And obviously, it’s so much more, so much more impactful.

The things that you’re telling me right now are so powerful, to go from thinking about what your business does to why you are in business in the first place. And obviously have why that’s much more profound than “let’s just make some more money” or something like that.

That’s phenomenal. Now there was this really great moment that I loved in that interview, where you explained how EOS has this model: the visionary, which you mentioned, and an integrator. That model exists at your agency, and you’re essentially the dreamer and your COO is the realist. Can you talk about how that works for you?

Matt Heinz: This is another thing that’s really helped me exist in my role. So, first of all, in EOS, there’s a distinction between the visionary and the integrator. The visionary is usually the founder and sort of the big thinker and the guy that goes into the lab and figures out new things.

I really don’t like that term visionary, Mike, it kind of makes me throw up a little in my mouth, but if you look at the definition of what that person does, it’s like, yeah, that’s me. I’ve got ideas a lot, and I got things I want to try to do. The integrator is the real rock of the business.

Like when I introduced Maria to people, I’d say, “She’s my COO. Like she legit runs the business.” The nice thing about that relationship is to say, “I’ve got someone I know and trust that is aligned on purpose, values, and mission to make sure that the engine continues to run, to think about the financials and the structure behind the business, and to, quite frankly, say no to nine out of the 10 ideas that I have.”

Some people would look at that and say that is frustrating.

But I think it’s liberating because it allows me to say, “Here are some new ideas. Here’s some creative things we could do. Have we tried this? Have we thought of this? Have we thought of this?” And even in between those quarterly meetings, she’s able to say, “Well, we don’t, if you want to do this, we can’t do this” or “You’re right. Yeah. Don’t do that. Okay. Or then this is a good idea, but it isn’t scale. It’s going to distract us from what we need to be doing.”

It liberates me to be free with those ideas. I know that someone is going to put it through the reality test. And so there’s a book in the EOS literature called Rocket Fuel. It is all about that relationship between visionary and integrator. And when you can dial in with the right people that are aligned, it really is powerful.

I am very lucky that I have an integrator that is phenomenal. We’ve worked together here at Heinz Marketing for 15 years. So I actually was my first hire long ago. We worked together as a company before that, and it’s just been a great relationship and a huge part of making ELS successful for us.

Mike Allton: That’s first of all, that’s incredible that you guys have been working together for that long. That’s amazing. And I also want to put [readers] on the hot seat for just a second because most of you listening are agency owners, you’re the visionaries, and you probably don’t realize just how disruptive it is when you go directly to a team member with an idea in the middle of the quarter. They don’t typically feel like they’ve got the power or the history or the incentive to stand up and say, “I don’t really think this is a good idea right now because you’re the owner. You’re the CEO.”

Matt Heinz: I agree. They want to please you.

They’re like, “The owner wants me to do this. I want to look good to them.” And I will tell you that transitioning into EOS, even if you’re well-meaning and even if you’re bought in, you got to break some habits. And in a well-meaning way for a while, there were still times when I would email other people.

I was like, “I don’t want to have to run it by Maria. I know we need to do this. I mean, nobody’s the first person.”

And four to five times Maria’s like, :A, not the B. Here are the six reasons why that isn’t a good idea right now. And you just disrupted someone from the work that you asked that we told them at the quarterly, they need to be focused on.”

And you’ll hear the I was well-meaning thing.

This is not some fly-by-night system someone invented. This is a proven operating model for fast growth, innovative, creative businesses.

And like I said, like, I mean, so Maria and I not only do, are we in lockstep, but you know, we have.

We’re at communication daily. We have a weekly one-hour, what we call our same-page meeting. Same page is another sort of general tool out of the EOS vernacular. We use a tool called 90, it’s a tool specifically built for those running EOS, and we’ve got an agenda for our 90, immediately for our same page meetings that we will look at, and we’ll triage, and then we’ll work through those issues.

And I can add stuff, and she can add stuff. I can send stuff in between and it goes on a separate visionary log that she uses to triage all of the crazy things I’ve come up with.

And so, you gotta lean into that system to make this work. What I’ve found, too, is whether or not you use EOS, you grow. Even if we weren’t using EOS, we would not have the alignment and the growth potential if I had kept all those Legos to myself, if I kept responsibility of things that I said. I know how I want to do it, and I don’t know that I can trust someone else.

You become your own limiter. You may not see that, and you may not feel that, but if the business isn’t growing and other people are frustrated, you’ve got a churn issue. That’s when you got to look in the mirror.

I think even before EOS, there was a moment that for me, even as we implemented EOS, I had to accept things that were going to be different about how the business was going to run, about decisions people were going to make, about things I was no longer involved in.

And again, I started by thinking that was restrictive. I started by thinking that was a negative. And if you are an owner and you are that visionary and that creative person has new ideas, it’s the reason why you have your business. It is the reason why you’re successful. This system allows you to lean into that.

But you gotta have a system you trust, you gotta have a VTO (Vision Traction Organizer) you trust, and you have that relationship with your integrator. It’s absolutely essential.

Mike Allton: In the years since you’ve implemented this system, what have been some of the issues that you’ve faced with the system that other agencies listening might want to know about, maybe avoid?

EOS issues to avoid

Matt Heinz: Well, I think we hired an implementer to help us launch it. and we worked with him for about a year and a half until we felt like we could do it on our own.

I would highly recommend if you’re going to do it, do it right. And if you’re worried about the cost of an implementer to put this in place for you, then you’re probably not the size or just the intellectual capacity to do it.

Look, I’m sole owner. Every dollar we spend on expenses or anything that’s related to the business is a dollar I don’t put in my pocket or give to my family.

So, you know, bringing integrator in was material, but we would not be as successful as we are today. We would not be as good at operating EOS. And when I say successful, I don’t mean we’re growing, you know, 80 percent a year. The last year and a half has been hard.

We’ve had to make some hard decisions. We aren’t on the trajectory we thought we would be two years ago. But I consider that a success because we’ve been able to leverage EOS to help us make some of those hard decisions.

I don’t think I would have had the visibility into some of the future clouds and future storms ahead of us if it weren’t for the EOS discipline: the dashboard we put in place and the meeting cadence and the transparency we have around some of those issues.

So to me, like, success isn’t just everything’s daisies and bubblegum and puppies. It’s also managing your business effectively during good times and bad.

Leaning into the system, using an integrator to start, and then keeping the discipline that EOS recommends … I’ve seen companies that say, we implement part of EOS.

I don’t know that you can do that.

It’d be really easy to say, well, we don’t need to meet for 90 minutes. Let’s just do 30 most times. And we’ll meet for an hour. You’re not going to get the full value out of the system. You’re not going to get the full value of that team getting together and triaging your biggest issues.

The most successful companies that are using EOS have leaned into the system and have learned over time that it is the opposite of a burden. It is the opposite of constricting. It is the opposite of some onerous investment that’s just going to take your time and money away from you.

It is the opposite of that. It is going to enable you personally to have the role in the business you want.

I feel like I’ve been doing an EOS commercial here, Mike. But I’ve seen companies half-ass it and I’ve seen companies like ours and others do it really well and in good times and bad.

This is a pillar for us of running our business, right?

Mike Allton: Well, to your point, there were plenty of companies that went out of business during the pandemic, during the recession, whatever we’re going to call it, the bad economic times post-pandemic. Having that system in place obviously helped you a lot weather that storm, so those of you [reading] this, this is the kind of system that you should have in place now.

There will be more storms in the horizon. We don’t know what they’re going to look like or when they’re going to come, but having your system prepared and thinking about the metrics that matter and focused on the initiatives that are going to actually move the needle for your business will help you prepare for those.

Matt Heinz: It’s like a lot of things in your business, right? If you feel like, “Hey, we’re just just in survival mode right now. We can’t afford to spend time on a new operating system. We can’t afford to spend time on an implementer,” I get it. And you’re probably right.

But when the storm clouds are gone and when it gets sunny, for many of us in services and B2B, that’s when you put these systems in place. That’s when you go increase your line of credit when you don’t need it and haven’t needed it for a while and wonder if you still will ever need it.

Yes, you will and get as big a one as you can so that you have that flexibility. And so you have to think about those things in that order to give yourself the tools and the flexibility to run your business over time.

So this may not be the right time for EOS for you, and EOS may not be the right system for you, but I would encourage you to just be very honest and introspective about what you enjoy about running your business, what you don’t enjoy about running your business and what.

Ceilings you are bumping up on now in the past and the future that keep you from getting where you want to be personally, where you want to think your business could be in the impact.

Mike Allton: Couldn’t agree more. Now you mentioned tools. I know you talked a little bit about 90 before.

Could you share a little bit more about what that is exactly and how that helps organizations keep up with this structure?

Matt Heinz: So again, I don’t mean this to be a commercial, but 90 is spelled out 90.io. I think it’s called that because the L10 meeting is 90 minutes. It’s called the L10 meeting because L for leadership 10, because at the end of the meeting, you rate it, and it’s a rating of 0 to 10, and you want everyone to give it a 10. If it’s not a 10, you want to talk about why because that’s the way to have conversations about how to get better.

So when I’m looking at my dashboard over here on my other screen, it’s got our rocks for the quarter and how we’re doing on those. It’s got our leadership dashboard that shows me all the key metrics of how well we’re doing, including that longer-term vision.

I’ve got a metric that says in 90 days what is my projected cash balance to be? I want to have at this point, at least two months of cash in the bank at any given time. So now I have a vision for 90 days, lhow close am I to that? How far away am I from that? How much it makes in excess of that? And based on that we can think about other investments we want to make in the business.

There’s to-dos for people that are in the system.  The VTO is a critical part of this. The Vision Traction Organizer, I have access to that at any time. The accountability charts is in there. I’m in this every day as a means of sort of prioritizing my time, keeping our efforts in our rocks in the right place.

And then when it comes time to do those leadership meetings, it just there. It walks you through doing those pieces and has a time period for how you’re supposed to spend time. You know, five minutes on this. Fve minutes on this, 45 minutes on that. We could probably operate EOS without this tool. It would just be a lot more manual and a lot more time.

Mike Allton: Yeah, totally agree. We’ve implemented it at Agorapulse. We’ve been using it for a year and a half, I want to say. One of the things that we really appreciate is that scorecard part of 90 where it’s baked into every single meeting. You are going to review the metrics that you’ve all collectively decided.

These are the most important metrics that we need to be looking at and the focus is on a weekly basis, which for some organizations like ours, that’s hard.

It’s hard to put a lot of the metrics on a weekly cadence, but the whole point is that if you’re not looking at those metrics on a weekly basis, then it might be three, four weeks or a quarter before you realize something’s off. But if you can put them into a weekly cadence, you can surface and bubble up those issues far more frequently and then figure out time to address them.

Matt Heinz: On a weekly basis, we look at things like, what are our sales for the quarter? We look at that cash balance number. We look at cheers submitted. So we have a tool where we encourage our employees to submit cheers and sort of just accolades to each other.

We’ve got a goal for that. Those are the things we can look at on a weekly basis, but we’re not looking at gross margin on a weekly basis. Like we’re not that kind of business. So that’s a monthly metric. And there’s a monthly tab that lets us go in there and plug that in and see how we’re doing. so it just really depends on sort of where you’re at …

You got to face the problems and figure out what are you going to do to solve it and get around it and get through it.

Mike Allton: I want to switch gears for a little bit.

The first question is with regard to organic social media. Now you can think about this question from your own perspective or on behalf of your clients, but I’m really curious how you measure the business impact.

Matt Heinz: The answer to this has changed over time, right? Like we used to be real big into Twitter. We spend less time there now. I, do a lot of work on LinkedIn.

I would first tell you that we are not the best at our measuring our social media, but I can see the impact when you look across how well we are doing at an individual and corporate level across multiple channels. And for us, it’s LinkedIn. It’s a little bit of X, it’s Instagram. we haven’t gotten into the TikTok too much. but we do have metrics around reach and so we do look at what kind of reach do we have as a business?

We’ve got our newsletter list, we’ve got our website, but then we look at our social reach as well. How well are we influencing individuals there?

The tools we do have show us how much more important it is for individuals to be sharing content versus corporate pages …

So we’ve learned a lot of lessons therE. It’s also sort of taught us about what kind of things we should be doing different types of content, video versus audio versus long form versus short form in different formats. So it’s a lot of experimentation and it’s really also just thinking about it as part of a broader body of work for us.

I don’t know any company that’s able to say, “Well, we’re putting all our eggs in the basketball, but all our eggs in a direct marketing basket or we all our eggs in it for B2B.” It’s never that simple, you know. But I love the fact that we can get more people aware of Heinz marketing but more importantly aware of the amazing people behind Heinz marketing that isn’t Matt Heinz that’s doing the work.

We can use our content and social engines to accelerate the awareness and perceived expertise and general perception that, if Matt went away, there’s nothing that changes with the quality of what you’re getting from his marketing, from these people.

Mike Allton: Fantastic. And now my last question for you, Matt, just want to know what’s in your tech stack. And I always like hearing from agencies.

What tools would you share with the agencies?

Matt Heinz: I mean, for a fairly small agency, we’ve got a pretty decent stack. We’ve got Marketo, we’ve got Salesforce, we use Outreach. I use a tool called Lead IQ. That’s a contact tool. That’s been super, super helpful for me. We’re big on Slack from a community management standpoint as well.

We love using Sendoso, to do fun surprises for people in our pipeline. But honestly, we try to keep it pretty simple. You know, the strategy process playbooks that we do for our clients, we develop for ourselves. And we just try to be really consistent and value-added across the channels that we have.

Mike Allton: Matt, you’ve been absolutely amazing. This has been such a fun conversation. For those who want to learn more about the work that you’re doing, the topics you talked about, where can they go to find you and your agency?

Matt Heinz: Just find us at HeinzMarketing.com.

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How to Structure Your Agency to Win Using EOS

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